Monthly Archives: May 2019

Back in 2012, the Richard Review of Apprenticeships explored what apprenticeships should be like in the future, and how they could meet the needs of a changing economy. Upon finding an extraordinary number of qualifications, which could be stitched together in an infinite number of combinations leading to any number of possible outcomes Richard’s called for turning the system on its head by having fewer, clearer standards (preferable one per occupation), that covered what employers required for an apprentice to be competent in that occupation. In Vision 2020 Government set out its programme for the reform and growth of apprenticeships. As part of a concerted attempt to address skills shortages and meet employers’ needs Government was aiming to increase the number of apprenticeships significantly. What are apprenticeships, how does the current system work and what needs to be done to ensure more are on offer in rural areas? Jessica Sellick investigates.   

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What are apprenticeships? 

According to Government, an apprenticeship is ‘a real job, with hands-on experience, a salary and the chance to train while you work. You’re treated just like all the other employees, with a contract of employment and holiday leave.’  Apprenticeships combine practical training in a job with study (the equivalent of one day a week). Apprentices have the same rights as other employees and are entitled to be paid at least the apprentice rate of the national minimum wage and may receive a nationally recognised qualification on completion of their apprenticeship. 

Apprenticeships are available to anyone over 16 years living in England [separate schemes operate in Northern Ireland, Scotland and Wales]. Apprenticeships take between one and four years to complete and cover some 1,500 occupations across 170+ industries. 

Apprenticeships can be studied at different levels. From intermediate (Level 2) which is equivalent to an educational level of 5 GCSE passes at grade A*-C or 9-4; to advanced (Level 3) which is equivalent to 2 A Level passes /level 3 Diploma or International Baccalaureate; to higher (Levels 4, 5, 6 and 7) which is equivalent to foundation degree and above; and degree (levels 6 and 7) which is equivalent to a Bachelor’s or Master’s degree.  

There are two different types of apprenticeships: Frameworks and Standards. Government is aiming to move from Frameworks [which were established by sector bodies to assess apprenticeships and are qualification led] to Standards [which are employer driven and occupation-focused] by 2020. Standards were first introduced in September 2014 and are developed by trailblazer groups representing groups of employers and sector organisations.  As of 25 March 2019, there were 421 Standards approved for delivery, 166 Standards in development, and a further 73 proposals in development.  

How many apprentices are there? 

According to the Department for Education (DfE), there were 192,100 apprenticeship starts recorded between August 2018 and December 2018 for the 2018-2019 academic year. This compares to 175,100 reported in the equivalent period in 2017-2018; 230,400 in 2016-2017; and 224,400 in 2015-2016. Of the 192,100 apprenticeship starts reported so far in 2018-2019, 59.1% (or 113,500 people) were on apprenticeship standards. 

In the 2017-2018 period, there were 48,150 higher level (Level 4+) apprenticeship starts, compared to 3,700 in 2011-2012. Between 2016-2017 and 2017-2018 higher level starts rose by 31.7%. In contrast, both intermediate (Level 2) and advanced (Level 3) apprenticeships declined between 2016-2017 and 2017-2018 – by 38.1% and 15.9% respectively.  The average expected duration of an apprenticeship has increased from 529 to 612 days in the first half of 2017-2018; with the expected off-the-job training hours also increasing from 560 to 700 hours.

83% of apprenticeship starts in 2017-2018 were concentrated in four sectors: business, administration & law (30% of all starts); health, public services & care (24%); engineering & manufacturing technologies (16%); and retail & commercial enterprise (14%). 

814,800 people completed an apprenticeship in 2017-2018 – down 1,600 on the previous year. All regions saw a fall in apprenticeship starts between 2016-2017 and 2017-2018: with apprenticeship starts in the North East falling from 34,000 in 2016-2017 to 23,000 in 2017-2018 (down 33%); the West Midlands falling from 60,000 in 2016-2017 to 43,000 in 2017-2018 (down 29%) and the East Midlands falling from 48,000 in 2016-2017 to 34,000 in 2017-2018 (down 29%). The lowest falls were recorded in London and the South East (both down by 17%). 

Since March 2017, public bodies with a headcount of 250 or more employees in England in each year from 2017 to 2020 are required to meet a minimum target set by Government of 2.3% apprenticeship starts each year [this can be applied to new recruits or existing staff]. This means Government expects public bodies to ‘have regard’ to this target in their workforce planning decisions and use the Apprenticeship Activity Return to demonstrate how they have had regard to the target.  

In March 2019, the National Audit Office (NAO) published a report looking at whether apprenticeships are providing value for money.  According to the report, for the period 2017-2018 public bodies reported that 1.4% of their workforce had started an apprenticeship. This figure was based on returns from 676 bodies and equated to 45,300 starts in total. 

While there was an increase in starts in April 2017 the NAO suggests it is unlikely that the Government will meet its target of 3 million apprenticeship starts by 2020. In 2017-2018 there were some 375,800 starts – 26% lower than the 509,400 starts in 2015-2016, with falls marked at Level 2. To achieve its own target, this means the Government would need new starts to double for the remainder of the period. Indeed in May 2019, The Rt Hon Anne Milton MP (the Minister of State for Apprenticeships and Skills) suggested not only will Government miss its own target but it will have to rethink its strategy next year. 

The NAO further described the DfE metrics for measuring performance – with a focus on starts rather than the 32% of people who completed their apprenticeship in 2016-2017 who did not achieve it. There is also insufficient data to determine whether people remain with an employer at the end of their apprenticeship and reap financial gains (what are the financial earnings gained according to level, sector). Further, the NAO identified an oversight gap in how the Education and Skills Funding Agency (ESFA) ensures apprentices spend at least 20% of their time on off-the-job-training. 

How are they funded? 

Since April 2017 Government has been implementing changes in the way apprenticeship funding works – much of this can be traced back to the Government’s Industrial Strategy. In April 2017 the apprenticeship levy came into effect for all UK employers with a pay bill of more than £3 million and/or employers connected to other companies or charities which have in total an annual pay bill of more than £3 million. The levy is set at 0.5% of the value of the employer’s pay bill, minus an apprenticeship levy allowance of £15,000 per financial year. The levy is paid into an apprenticeship service account with funds in it then spent on apprenticeship training and assessment. Employers pay their levy to HMRC each month through the PAYE process – with the amounts paid dependent upon each month’s pay bill. The Government applies a 10% top-up to the funds paid by an employer through the levy.  Levy-paying employers register for an apprenticeship service account which is then used to pay for apprenticeship training and assessment.  The funding expires 24 months after it enters to service account – employers are able to transfer 10% of their funds to other employers (capped at a maximum of 10% of their annual funds). 

Since May 2017, employers paying the Apprenticeship Levy have been able to select a provider from the Register of Apprenticeship Training Providers. The Register lists: (1) main providers: organisations that be selected by levy paying employers to deliver apprenticeship training; (2) employer providers: levy paying employers that can provide training to their own staff and/or apprentices in connected companies; and (3) supporting providers: organisations that can only deliver as part of a subcontractor for contract values of between £100,000 and £500,000 per year. Organisations that would like to deliver apprenticeship training but at a value of less than £100,000 are not required to register.

In April 2018, the OECD carried out a review of Apprenticeship programs in England. The OECD found English apprentices receive 50-100 hours of general education over the course of their apprenticeships, with general education only mandatory for those not meeting the minimum requirements in mathematics and English. This compares to around 400 hours of general education covering a range of subjects in German and Swiss apprenticeships, and nearly 600 hours in Norwegian apprenticeships.   The report also found apprenticeship workplace training in England was not systematic and subject to little quality assurance. Lack of standards with regard to training in workplaces increases the risk that employers will substitute apprentices for unskilled workers, the OECD argues. The reviewers recommended increasing the amount of education in apprenticeships for young people; supporting the development of systematic training provision; keeping apprenticeship qualifications broad and few in number; reviewing the assessment market; providing pre-apprenticeship programmes for disadvantaged young people to progress into full apprenticeship programmes; and ensuring that all apprenticeships include a substantial element of work-based learning with an employer. 

According to the NAO report, £1.6 billion of public money was spent on the apprenticeships programme in 2017-2018 alongside the £2 billion contributed by levy paying employers. While these seem large sums, the average cost of training an apprentice on a standard is double what was expected; raising concerns that the programme will overspend in the future. This is because employers are now choosing more expensive and higher level standards than the DfE expected. The average cost of training an apprenticeship in 2017-2018 was approximately £9,000. Projections show that, even if starts remain at current levels, spending could rise to more than £3 billion a year once frameworks are withdrawn and all apprenticeships are on standards. 

Back in October 2018, the House of Commons Education Committee recommended increasing the top funding band, doubling the time employers have to spend their funds, allowing more levy transfers and providing greater flexibility to the 20% off-the-job training requirement. 

What do employers and apprentices think? 

The Open University commissioned independent market research among 750 senior business leaders from small, medium and large employers across the UK. 84% of respondents supported the apprenticeship levy in principle. 4 in 5 businesses in England either already employ apprentices or plan to do so in the future; and are using apprenticeships to build up skills amongst their existing staff (27%) or to train new staff (54%). Some business leaders have found apprentices make the rest of their workforce more productive and that they pass on what they learn leading to a more motivated and satisfied workforce. From an employer perspective, 34% believe apprentices bring a fresh approach and positive attitude to the workplace; 23% that apprentices are more loyal and easier to retain than other staff members; and 20% that apprentices are more productive than other members of staff. 51% of employers agreed that apprenticeships were less disruptive to their business than other forms of training. In the words of one employer “in my experience, people have a natural desire to pay you back if you invest in them. Apprentices may stay with you for longer, as they feel appreciated and well recognised. Longer-serving employees see apprenticeships as a great opportunity to leave a legacy and get benefit from developing their potential.” Employers suggested greater flexibility in apprenticeship content, including modular apprenticeships (modelled in a similar way to The Open University’s open degrees), would be beneficial going forward.  

Some employer groups have called on some of the levy to be spent on pre-employment engagement with schools, parents/carers and pupils – which takes up much time and requires additional resourcing.   

Other organisations query if the apprenticeship changes have diminished the quality of apprenticeships – with the list of roles covered often offering minimal training and representing low wage jobs that do not constitute skilled occupations? The suggestion here is that some employers may rebadge existing training courses as apprenticeships to shift the training costs onto Government.  

In 2017 Investors in People conducted research into how young people perceived apprenticeships. Of the 1,000 young people surveyed, 45% had considered an apprenticeship. Of the 53% who said they had never considered one: 62% of them said they wanted to do A Levels and go to university; 28% that the industry they want to work in does not offer apprenticeships, 26% thought apprenticeships were known for giving low pay; 16% said their school or college didn’t provide them with information about apprenticeships and 11% thought apprenticeships were for low skilled occupations. The research reveals that while young people have heard of apprenticeships, many are not aware of what they are in practice (e.g. career opportunities, pay) leaving many unsure ‘what’s in it for me?’ 

The Social Mobility Commission 2018 barometer found respondents were more likely to think an apprenticeship offers the best opportunity for young people to progress in life and career than other routes – with 30% thinking apprenticeships offer the best route compared to higher education (26%), further education (14%) and just starting work (8%). However these figures differ by age with those aged 65+ years more likely to suggest apprenticeships than those aged 18-24 years – in the younger cohort 20% would choose an apprenticeship compared to 34% wanting to go into higher education.  

In November 2018, the Government commissioned a learners and apprentices survey. The findings, based on 12.872 interviews (2,287 online and 10,585 by telephone), reveal that while half of all apprentices are young people (aged 19-24 years), the apprenticeship sector is serving people in their 30s, 40s, 50s and 60s. Typically apprentices are already working for their apprenticeship employer (62%) or had started their apprenticeship straight after finishing full-time education (18%). The main reason for starting an apprenticeship was because their employer had offered it to them or had made it a requirement of their job. Three-quarters of apprentices that had never worked before completing their apprenticeship had moved into and remained in paid work at the time of the survey. Nearly three-quarters of apprentices who completed or were still working towards an apprenticeship agreed their chances of earning a higher wage in the future had increased; with 8 in 10 agreeing their chances of going on to higher levels of training had increased. There was some evidence that where apprentices had left it was for other employment or training. 

According to Government, the monetary benefits of completing an apprenticeship to an individual over their working life are estimated to be £48,000-£74,000 for Level 2; £77,000-£117,000 for Level 3 and £150,000 for Level 4 or above.  

In a series of blogs, young people have described their positive experiences of apprenticeships – see Hyo, an apprentice in the Cabinet Office; Hugh Gaffney, an apprentice at The Careers & Enterprise Company; Rob O’Connor, an apprentice at Accenture, Dominic and John, apprentices at RSA; and Joanna, an apprentice at Argies Coffee.   

What about apprenticeships in rural areas? 

According to Defra’s Statistical Digest of Rural England (March 2019), the proportion of working age population with at least one qualification, with an NVQ2 and/or an NVQ4 has been consistently higher for the total rural category than for those living in the all urban category. But the proportion of people with NVQ4 or equivalent is much higher for people working in rural areas – 44.7% compared to predominantly rural areas (35.4%). A higher percentage of people working in urban areas receive on-the-job training than people working in rural areas – 12.9% in predominantly rural areas compared to 13.3% in urban areas. However, some people who live in rural areas will travel to urban areas for work so these skills will not necessarily be used in rural areas. 

If you do a key word search on apprenticeship standards entering the word ‘rural’, generates 1 result (for highways maintenance skilled operative); countryside generates 1 result (countryside worker – this standard is in development), agriculture generates 3 results (professional advisor in agriculture/horticulture – in development, land-based service engineer, land-based service engineer technician); and there are 20 results for natural environment (including crop technician, forest operative and poultry worker). Aside from the apprenticeship standards; many RSN members will be familiar with apprenticeships offered in their own areas – from those in national parks (e.g. the Lake District, North York Moors); to those across England – from Cornwall to Cumbria; from Hampshire to Hertfordshire; and from Leicestershire to Worcestershire. The search facilities on existing platforms do not always reveal the geographical and sectoral diversity of opportunities available in rural areas. 

While there is often little difference in the sectors between rural and urban areas, the context is very different and this can bring additional challenges when providing apprenticeships. 

Jo Maher, principal and chief executive at Boston College, highlights some of the rural challenges and opportunities facing colleges, apprentices and employers.  For apprentices living in rural areas the greatest challenge is the time and distance it can take to access an apprenticeship. The greatest challenge for rural college leaders is that assessors have the same time and distance issues as the apprentices they need to assess – compounded by the fact that many employers in rural areas are micro-businesses and only employ one apprentice. Colleges have to model delivery on an assessor spending an hour with a maximum of four apprentices a day to allow for this travel time whereas in an urban area an assessor might be able to train up to seven apprentices in a day. The challenges for employers in rural areas include size, scale and breadth. Maher’s recommendations to better support apprenticeships in rural areas include: providing an uplift [calculated in a similar way to the disadvantage uplift in full-time FE funding]; setting up an apprenticeship loan system – where a larger company is able to loan an apprentice to an SME with a view to bringing them back a year later to progress their employment and leaving the rural SME with a regular supply of apprentices; and establishing a ‘quality mark’ to enable apprentices to select employers in the same way as they can look at a college’s Ofsted grade and feedback score; this means employers could better able evidence their role in providing high quality training.  

These insights chime with witness testimony provided to the Select Committee on the Rural Economy. For example, the Centre for Rural Economy (CRE) described how an apprenticeship criterion often favours larger firms, making it harder for rural SMEs to host apprentices. With a higher proportion of older people living in rural areas CRE advocated changing the age limits to attract people of working age at later stages of their careers. Countryside Alliance  identified that ‘affordability’ and time can be real barriers for land-based SMEs wanting to offer apprenticeships. On a more positive note, National Parks England noted that the Government’s 8 Point Plan for National Parks had led to a 91% increase in apprenticeships in National Park Authorities and that hosting an apprenticeship had doubled since April 2018.  

For me, what these findings reveal is the need to focus on rural communities and places rather than apply a one-size-fits-all approach to apprenticeships. This means communities thinking through how they can attract and retain employers and apprenticeships (e.g. Rock the Cotswolds): what rural assets and aspirations can be built upon and what locally defined rural apprenticeship priorities emerge? We also need to provide training and development opportunities for SMEs that works well in rural places; and ensure that adequate funding; support and assessment processes are in place. 

Where next? 

In September 2018, the House of Commons Education Committee called for ‘stronger, clearer oversight of apprenticeship training and assessment. New providers should get a monitoring visit from Ofsted in the first year….Ofqual should be given responsibility for the external quality assurance of all end-point assessments….we found enthusiasm for the opportunities apprenticeships can offer and commitment to seizing them. There can be no doubt that apprenticeships work. However, we think they could work even better and on a greater scale.’ Many of the Committee’s recommendations chime with rural areas, including: providing more bursaries, increased incentives for small and medium sized businesses and a new social justice fund to support organisations that help the hardest to reach.  

In January 2019 the Department for Education (DfE) launched a new campaign to promote apprenticeships among young people, parents, schools and employers. ‘Fire it up’ aims to shift deeply held views and drive more people towards an apprenticeship. With an increasing variety of apprenticeship options available for people of all ages and backgrounds, if we need to improve both productivity and social mobility; for Government apprenticeships will continue to play a central role in maintaining our skills base. 

In March 2019 the Skills Commission, Policy Connect and the Learning and Work Institute embarked on a new project to map the blueprint for an ecosystem that can adapt to current and future economic and social priorities. In asking whether the national skills system [including apprenticeships] is serving different communities and businesses across the UK; the project inquiry team is visiting Spalding (Lincolnshire), Middlesbrough and Bristol and are running a call for evidence until 27 May 2019. 

More recently, in April 2019 the House of Lords Select Committee on the Rural Economy published its report. Seeing apprenticeships as a route to addressing skills shortages in rural areas, the report contained a series of recommendations, including: (i) reviewing apprenticeship criteria to make it easier for rural SMEs to host apprentices and provide new land based apprenticeships; (ii) reviewing funding arrangements for apprenticeships to make it easier for smaller businesses to engage; (iii) increasing the amount of apprenticeship levy that can be transferred from large to small firms should be considered; and (iv) with local industrial strategies focusing on skills there could be a renewed focus and improvements made to support rural apprenticeships.  

In 2020 the Government has plans to refresh its apprenticeship strategy as part of attempts to increase the number of apprenticeships. 

How can we ensure that rural communities and businesses are ‘fired up’ and part of this policy conversation? Will the House of Lords select committee recommendations be taken into account?  And, ultimately, what more can be done to deliver apprenticeships in rural areas and what metrics do we have or can we develop to measure success?   

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Jessica is a researcher/project manager at Rose Regeneration. Her current work includes evaluating two veteran support projects (in Cornwall and North Yorkshire); supporting public sector bodies to measure social value; and evaluating a series of community safety and crime reduction projects. She was recently part of the team that successfully bid to create an Institute of Technology in Lincolnshire.   

She is also a senior research fellow at the National Centre for Rural Health and Care (https://www.ncrhc.org/). 

In her spare time Jessica sits on the board of a housing association. 

She can be contacted by email jessica.sellick@roseregeneration.co.uk or telephone 01522 521211. 

Website: http://roseregeneration.co.uk/ 

Blog: http://ruralwords.co.uk/ 

Twitter: @RoseRegen